VANCOUVER -- Blame the rising Canadian dollar, now at a 10-year high against the U.S. dollar, or blame global competition.

Whatever the culprit, British Columbia's once high-flying film and TV production industry is in a freefall.

After a record-breaking 2003 with production revenues valued at C$1.4 billion ($1.12 billion), B.C.'s industry is suffering a 25% drop in shooting days and a similar rise in unemployment numbers, according to Susan Croome, the province's film commish.

Croome says there is no dollar figure available yet, but the industry here expects B.C.'s production revenues this year to slide below $800 million for the first time in three years -- with no relief in sight.

California Gov. Arnold SchwarzSchwarzenegger's efforts to keep production at home, tax incentives from other states and increased competition from Australia, New Zealand, Bulgaria, Romania and South Africa are all being fingered by the industry here for the disastrous drop.

About 20 relatively small projects are in production now, compared with more than 30 at this time last year.

B.C.'s film industry is also facing stiff competition from the prairie provinces, which have lured away films with fresh locations and attractive tax credit systems.

Manitoba has introduced a frequent filming bonus, offering an extra 5% tax credit if producers shoot two movies there in two years.

"It's very smart," Vancouver producer James Shavick said. "If you're a movie-of-the-week guy and you're not making Canadian content, that 5% is very significant."

Manitoba has also just added a 5% rural and northern incentive that can be combined with the current 35% tax credit on qualifying productions.

B.C.'s right-wing Liberal government is concerned about the depressed industry. It will fight an election next year against the film union-friendly NDP party.

The provincial Libs are offering producers a digital animation or visual effect tax credit of 15% of accredited labor expenditures.

The government is also continuing its 11% tax credit for labor costs; for producers who shoot outside of the Vancouver area, there is an additional 6% regional tax credit.

The ruling Liberal party in Ottawa is also helping out. The feds have bumped up the Canadian Film or Video Production Services Tax Credit, which is mainly for the benefit of U.S. producers, to 16% of Canadian labor costs from the previous 11%.

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